Mark and Doug are two Christian economists seeking to combine economics and theology in a fun, thoughtful, and inviting fashion. The name of the blog is a reference to Jesus' admonition to his disciples to be "wise as serpents and innocent as doves" (Matthew 10:16) when going forth into the world. We hope you join the conversation.

Thursday, October 20, 2011

Rent

In a discussion in our Theory of Moral Sentiments Readings Group, we delved into Prof. Gordon Tullock's pathbreaking article in which he introduced the idea of rent seeking (although the name came later from Anne Krueger). One of the questions Gordon raised was how one would measure rent seeking. For the United States, I have long promoted a metric such as "Count the number of Nordstrom and Neiman-Marcus stores in the Washington DC metropolitan area and multiply by the a normalized difference of the excess increase in housing prices in the D.C. area compared to the rest of the United States." Just kidding. But consider the news yesterday that the Washington, D.C. metropolitan area which historically has manufactured virtually nothing, long ago quit growing (gasp) tobacco, and has no known natural resources other than mosquitoes, is now officially the wealthiest (actually, highest income) part of the United States. This Versailles-on-the-Potomac produces one thing: government. I think that it's interesting to consider there were many things that the U.S. government, some of them relatively well, with Washington remaining a relatively sleepy Southern town. The big changes in D.C. came with the ramp up of the New Deal, then The Great Society, and then the social regulatory programs of one of America's most economically liberal Presidents, Richard Nixon (sorry Republicans, but do the math: OSHA, EPA, wage and price controls, AMTRAK, Title IX, and so forth). The current administration has successfully pushed the Washington team over the goal-line. (As long as I am ranting, can you imagine any other part of the country as hypocritical as Washington D.C. having a professional football team named the "Redskins" in the midst of all of the political correctness that it imposes on the rest of the country? To think that Florida State had to fight to retain the name "Seminoles" which is an actual (both historical and living) proper name and not an ethnic slur like "Redskins", well ... I guess it's time to stop ranting.)